Google Said Near $22.5 Million Settlement in Browser Breach

Google has drawn regulatory scrutiny and pressure from consumer advocates for the way it handles personal information. Photographer: David Paul Morris/Bloomberg

July 10 (Bloomberg) -- Google Inc., owner of the world’s
most popular search engine, is nearing an agreement to pay $22.5
million to settle a U.S. Federal Trade Commission probe over
claims it violated user privacy on Apple Inc.’s Internet
browser, a person with knowledge of the matter said.

The settlement would resolve an investigation over how
Google’s software tracked user activities when they accessed the
Safari browser, said the person, who asked not to be named
because the matter hasn’t been made public. A Stanford
University graduate student found this year that Google, using
its DoubleClick ad network, violated users’ privacy via the
Safari browser on devices such as the iPhone and iPad.

Google has drawn regulatory scrutiny and pressure from
consumer advocates for the way it handles personal information.
The Mountain View, California-based company signed a consent
decree with the FTC last year to settle allegations that it used
deceptive tactics and violated its own privacy policies in
introducing the Buzz social-networking service in 2010.

The fine would be the largest ever the FTC has levied
against a company and is further indication of the agency’s
stepped-up efforts to prevent companies from getting
unauthorized access to personal information on the Internet.

Clear Message

“This is a significant fine by the FTC,” said Jeffrey
Chester, executive director of the Center for Digital Democracy,
a Washington-based privacy advocate, adding that it sends a
“clear message” that Google violated the law.

The company on April 12 reported first-quarter revenue of
$8.14 billion, excluding sales passed on to partner sites.
Profit before certain costs was $10.08 a share.

Cecelia Prewett, a FTC spokeswoman, declined to comment.

“We do set the highest standards of privacy and security
for our users,” Google said in an e-mailed statement. “The FTC
is focused on a 2009 help center page.” The company has now
“changed that page and taken steps to remove the ad cookies,
which collected no personal information, from Apple’s
browsers.”

Bloomberg News, citing a person familiar with the matter,
reported in May that the company was negotiating with the FTC
over the size of the fine as the regulator prepared its case
that Google deceived Safari users.

Safari Bypass

Software cookies, which help websites and browsers identify
users, allowed Google to bypass Safari’s built-in privacy
protections to aim targeted advertising at users of Safari.
Google said at the time that it “didn’t anticipate this would
happen” and that it was removing the files.

In last year’s consent decree, Google settled allegations
it used deceptive tactics and violated its own privacy policies
in introducing the Buzz social-networking service in 2010. The
20-year agreement bars Google from misrepresenting how it
handles user information and requires the company to follow
policies that protect consumer data in new products and to
submit to regular privacy audits.

Chester said the FTC has focused on protecting people’s
online information.

“This FTC has been a good privacy cop on the beat,” he
said.

FTC Authority

The FTC has the authority to levy fines for violations of
its consent decrees of as much as $16,000 a day for each
violation.

In 2010, the FTC issued its largest fine, $18.8 million,
against Civic Development Group LLC, two of its executives and a
related management company for a telemarketing campaign
involving charity donations.

The agency issued its largest fine in a privacy-related
case against data broker ChoicePoint Inc. in 2006 for
compromises of personal financial records of more than 163,000
consumers. ChoicePoint agreed to pay $10 million in civil
penalties and $5 million in consumer redress in a settlement
with the FTC.

Google’s shares rose 1.38 percent to $586.33 at 12:21 p.m.
in New York. The shares have lost 9.1 percent this year. The
Wall Street Journal reported the settlement figure yesterday.